CADENCE DESIGN SYSTEMS, INC.
CONSULTING AGREEMENT
THIS CONSULTING AGREEMENT (the "Agreement") is made and
entered into this 1rst day of May 1994 between CADENCE
DESIGN SYSTEMS, INC. (the "COMPANY") and Henry E. Johnston,
("CONSULTANT").
THE PARTIES AGREE AS FOLLOWS:
1. Consultancy. CONSULTANT shall serve as a
Consultant to the COMPANY for a period commencing on the
date of this Agreement and concluding on the date set forth
in Schedule A hereto, subject to the termination of this
Agreement in accordance with Section 8. The period during
which CONSULTANT shall serve as a Consultant to the COMPANY
pursuant to this Agreement shall constitute the "Consulting
Period".
2. Duties. CONSULTANT shall serve as a consultant to
the COMPANY in the activities of the COMPANY set forth in
Schedule A or as otherwise requested by an officer of the
COMPANY. CONSULTANT shall perform such services under the
general direction of the COMPANY or its officers, but
CONSULTANT shall determine the manner and means by which the
services are accomplished. During the Consulting Period,
CONSULTANT agrees to perform all duties to the best of
his/her ability. In the performance of such duties,
CONSULTANT shall consult with the COMPANY up to the number
of days per month set forth at Schedule A, which days of
consulting will take place at the COMPANY's facilities or at
such other places as the COMPANY shall reasonably request.
CONSULTANT shall remain available for telephone consultation
with the officers, employees, or consultants of the COMPANY
or any of its subsidiaries or affiliates.
3. Other Employment.
3.1 Other Affiliation. CONSULTANT shall not use,
disclose or deliver any proprietary or confidential
information of third parties in dealings with the COMPANY or
in providing the services under this agreement. CONSULTANT
represents that he/she is not a party to any existing
agreement that would prevent him/her from entering into this
Agreement, and that the only agreements with third parties
which may restrict his/her consulting activities on behalf
of the COMPANY at the time of this Agreement are
CONSULTANT's obligations pursuant to the agreements set
forth in Schedule A. The COMPANY understands and agrees
that during the Consulting Period CONSULTANT may be retained
by other companies, corporations, and/or commercial
enterprises which are not engaged in the design,
development, manufacture or marketing of products similar to
those of the COMPANY. CONSULTANT agrees to inform the
COMPANY of any such agreement immediately. CONSULTANT
agrees to use his/her best efforts to segregate work done
under this Agreement from all work done at, or for, any such
company, corporation, and/or other commercial enterprise.
In any dealings with any such company, corporation, and/or
other commercial enterprise, CONSULTANT shall protect and
guard the COMPANY's "Confidential Information" (as defined
in Section 5.1 below) in accordance with the terms of this
Agreement.
3.2 Conflict of Interest. CONSULTANT warrants
that he/she is not obligated under any other consulting,
employment, or other agreement which would affect the
COMPANY's rights or CONSULTANT's duties under this Agreement
other than those referred to in Section 3.1.
4. Compensation.
4.1 Consulting Fees. The COMPANY agrees to pay
CONSULTANT and CONSULTANT agrees to accept for CONSULTANT's
services under this Agreement consulting fees (the
"Consulting Fees") as set forth in Schedule A. Payment of
the Consulting Fees will be made within 30 days after the
receipt of CONSULTANT's invoice.
4.2 Employment Taxes and Benefits. CONSULTANT
acknowledges and agrees that it shall be CONSULTANT'S sole
obligation to report as self-employment income all
compensation received by CONSULTANT from the COMPANY for
CONSULTANT'S services as a consultant. CONSULTANT agrees
to indemnify the COMPANY and hold it harmless to the extent
of any obligations imposed by law on the COMPANY to pay any
withholding taxes, social security, unemployment or
disability insurance or similar items in connection with any
payments made to CONSULTANT by the Company for CONSULTANT'S
services as a consultant.
4.3 Legal Relationship. CONSULTANT shall be an
independent contractor with respect to the COMPANY and shall
not be an employee or agent of the COMPANY. CONSULTANT
shall be entitled to no benefits or compensation from the
COMPANY except as set forth in this Agreement and shall in
no event be entitled to any fringe benefits payable to
employees of the COMPANY.
4.4 Expenses. CONSULTANT will be reimbursed only
reasonable costs and expenses incurred in performing duties
hereunder and only if the incurring of such costs and
expenses was approved in advance by an authorized individual
of the COMPANY. Such reimbursement shall be made within
thirty (30) days of submission of adequate and appropriate
documentation of such costs and expenses.
5. Confidentiality.
5.1 Confidential Information. CONSULTANT's work
for the COMPANY creates a relationship of trust and
confidence between the COMPANY and CONSULTANT. During and
after CONSULTANT's work for the COMPANY, CONSULTANT will not
use or disclose or allow anyone else to use or disclose any
"Confidential Information" (as defined below) relating to
the COMPANY, its products, suppliers or customers, except as
may be necessary in the performance of CONSULTANT's work for
the COMPANY or as may be authorized in advance by
appropriate officials of the COMPANY. "Confidential
Information" includes Innovations (as defined in Section 6.2
below), marketing plans, product plans, business strategies,
financial information, forecasts, personnel information,
customer lists, trade secrets, any other non-public
technical or business information, third party information
made available to CONSULTANT, joint research agreements or
agreements entered into by the COMPANY or any of its
affiliates, whether in writing or given to CONSULTANT
orally, which CONSULTANT knows or has reason to know the
COMPANY would like to treat as confidential for any purpose,
such as maintaining a competitive advantage or avoiding
undesirable publicity. CONSULTANT will keep Confidential
Information secret and will not allow any unauthorized use
of the same whether or not any document containing it is
marked as confidential. These restrictions, however, will
not apply to Confidential Information that has become known
to the public generally through no fault or breach of
CONSULTANT or that the COMPANY regularly gives to third
parties without restriction on use or disclosure.
5.2 Records. CONSULTANT agrees to keep separate
and segregated from other work all documents, records,
notebooks and correspondence which directly relate to
his/her work under this Agreement.
5.3 Record of Confidential Information. All
notes, memoranda, reports, drawings, manuals, materials,
data and any papers or records of every kind which are or
shall come into CONSULTANT's possession at any time during
the Consulting Period related to Confidential Information of
the COMPANY shall be the sole and exclusive property of the
COMPANY. This property shall be surrendered to the COMPANY
upon termination of the Consulting Period or upon request of
the COMPANY at any time either during or after the
termination of the Consulting Period, and no copies, notes,
or excerpts thereof shall be retained.
6. Innovations.
6.1 Company Property. All Innovations (as
defined in Section 6.2 below) made, conceived, or completed
by CONSULTANT, individually or in conjunction with others
during the Consulting Period shall be the sole and exclusive
property of the COMPANY, provided such Innovations (i) are
made, conceived or completed with equipment, supplies, or
facilities of the COMPANY, its subsidiaries or affiliates,
or (ii) are made, conceived or completed by CONSULTANT
during hours in which CONSULTANT is performing services for
the COMPANY or any of its subsidiaries or affiliates. It is
understood that nothing contained herein shall affect the
rights or obligations of CONSULTANT with respect to any
Innovations which are protected by Section 2870 of the
California Labor Code.
6.2 a) Disclosure of Innovations.
CONSULTANT shall disclose in writing to the
COMPANY all inventions, discoveries, concepts, ideas,
improvements and other innovations of any kind that
CONSULTANT may make, conceive, develop or reduce to
practice, alone or jointly with others, in the course of
performing work for the COMPANY or as a result of that work,
whether or not they are related to CONSULTANT's work for the
COMPANY and whether or not they are eligible for patent,
copyright, trademark, trade secret or other legal protection
("Innovations"). Examples of Innovations include:
formulas, algorithms, methods, processes, databases,
mechanical and electronic hardware, electronic components,
computers and their parts, computer languages, computer
programs and their documentation, encoding techniques,
articles, writings, compositions, works of authorship,
marketing and new product plans, production processes,
advertising, packaging and marketing techniques, and
improvements to anything.
b) Assignment of Ownership.
CONSULTANT agrees that all Innovations will
be the sole and exclusive property of the COMPANY and hereby
assigns to the COMPANY all rights in the Innovations and in
all related patents, patent applications, copyrights, mask
work rights, trademarks, trade secrets, rights of priority
and other proprietary rights. At the COMPANY's request and
expense, during and after the period during which CONSULTANT
acts as a CONSULTANT to the COMPANY, CONSULTANT will assist
and cooperate with the COMPANY in all respects and will
execute documents, and subject to reasonable availability,
give testimony and take further acts requested by the
COMPANY to acquire, transfer, maintain and enforce patent,
copyright, trademark, mask work, trade secret and other
legal protection for the Innovation(s). CONSULTANT hereby
appoints the Secretary of the Company as CONSULTANT's
attorney-in-fact to execute documents on CONSULTANT's behalf
for this purpose.
c) Moral Rights Waiver.
CONSULTANT hereby irrevocably transfers and
assigns to the COMPANY any and all "Moral Rights" (as
defined below) that CONSULTANT may have in or with respect
to any Innovation. CONSULTANT also hereby forever waives
and agrees never to assert any and all "Moral Rights"
CONSULTANT may have in or with respect to any Innovation,
even after termination of CONSULTANT's work on behalf of the
COMPANY. "Moral Rights" mean any rights of paternity or
integrity, any right to claim authorship of an Innovation,
to object to any distortion, mutilation or other
modification of, or other derogatory action in relation to,
any Innovation, whether or not such would be prejudicial to
CONSULTANT's honor or reputation, and any similar right,
existing under judicial or statutory law of any country in
the world, or under any treaty, regardless of whether or not
such right is denominated or generally referred to as a
"moral right".
6.3 Legal Proceedings. Whenever requested to do
so by the COMPANY, CONSULTANT shall promptly deliver to the
COMPANY evidence for interference purposes or other legal
proceedings and testify in any interference or other legal
proceedings which relates to any matters on which CONSULTANT
has provided services to the COMPANY.
6.4 Non-Infringement. CONSULTANT represents and
warrants that the services performed under this Agreement
and the Innovations made or contributed by CONSULTANT
hereunder will not infringe on any rights of any third
party.
6.5 License. To the extent that the COMPANY's
use or exploitation of any Innovations made or contributed
by CONSULTANT hereunder may require a license from
CONSULTANT under any other proprietary rights held by
CONSULTANT, CONSULTANT hereby grants the COMPANY a fully-
paid, royalty-free, perpetual, worldwide license to make,
use, sell, copy, modify, distribute, perform, display and
otherwise exploit such Innovations.
7. Non-Solicitation. CONSULTANT agrees that, during
the Consulting Period and for a period of two years after
the expiration or earlier termination of the Consulting
Period, CONSULTANT will not solicit or recruit Cadence
employees for any other employers outside the COMPANY or
employ any of the employees of the COMPANY without its prior
written consent.
8. Termination. The Consulting Period may be
terminated immediately, at-will by the COMPANY or CONSULTANT
for any or no reason upon notice to the other party. The
covenants and agreements set forth in Sections 5, 6 and 7
shall survive the Consulting Period and remain in full force
and effect regardless of such termination.
9. Severability. If a court finds any provision of
this Agreement invalid or unenforceable as applied to any
circumstance, that provision shall be enforced to the
maximum extent permitted by law, and the other provisions
will remain in full force and effect.
10. Notice. Any notice to be delivered pursuant to
this Agreement shall be in writing and shall be deemed
delivered upon service, if served personally, or three days
after deposit in the United States Mail, if mailed by first
class mail, postage prepaid, registered or certified with
return receipt requested, and addressed to the other party
at the following address, or such address as may be
designated in accordance herewith:
TO the COMPANY: CADENCE DESIGN SYSTEMS, INC.
Human Resources Department
2655 Seely Rd., Bldg. 5
San Jose, CA 95134
TO CONSULTANT: Henry E. Johnston
4001 Glenwick
Dallas, Texas 75205
11. Binding Effect; No Assignment. This Agreement
shall be binding upon CONSULTANT, and except as regards
personal services, upon CONSULTANT's heirs, personal
representatives, executors and administrators, and shall
inure to the benefit of the COMPANY, its successors and
assigns. This Agreement may not be assigned by CONSULTANT
and any attempted assignment by CONSULTANT shall be void.
12. Amendment. This Agreement may be modified or
amended only by mutual written consent of the parties.
13. Governing Law. This Agreement shall be governed
and enforced in accordance with the laws of the State of
California, excluding that body of law known as choice of
law.
14. Counterparts. This Agreement may be executed in
two or more counterparts, each of which shall be deemed an
original, but all of which together shall constitute one and
the same Agreement.
15. Entire Agreement. This instrument contains the
entire agreement of the parties relating to the subject
matter hereof, and supersedes all prior and contemporaneous
negotiations, correspondence, understanding and agreements
of the parties relating to the subject matter hereof.
IN WITNESS WHEREOF, the parties have executed this
Agreement as of the date first above written.
CONSULTANT: CADENCE DESIGN SYSTEMS, INC.
/s/ Henry E. Johnston By: /s/Thomas F. Rouse
Requester/Manager
Henry E. Johnston Thomas F. Rouse
(Please Print) (Please Print)
Social Security No.###-##-#### Title:Director, Comp & Benefits
or
Federal Tax I.D.# __________________
By: /s/ Scott W. Sherwood
Department V.P. (Up to $10K)
By: ______________________________
Controller (Up to $25K)
Forward to HR for Approval By: ______________________________
Exec. VP Finance (Up to $50K)
By: /s/ Scott W. Sherwood By: /s/ Joseph B. Costello
Human Resources 7/28/94 President (Over $50K)
Schedule A to
Consulting Agreement
ALL ITEMS BELOW MUST BE COMPLETELY FILLED IN.
DO NOT LEAVE ANY BLANK LINES.
1. Name of Consultant: Henry E. Johnston
2. Address of Consultant for notice:
4001 Glenwick
Dallas, Texas 75205
3. Term of Consulting Period: Start Date End Date
05/01/94 12/31/94
(a) Terms of Termination Agreement:
After 12/31/94, in accordance with Section 8 of this Agreement.
4. Duties of Consultant:
Provide Executive Consultation and advice to Cadence with emphasis
on Consulting Services and Sales Distribution channel segments
of the business.
5. Individual to whom Consultant reports (include location
and extension):
Joseph Costello, San Jose Five, Extension 7400.
6. Department Number/Account Number to be charged:
000-4100
7. Maximum number of days of consulting to be performed
per month:
Five
8. Other existing agreements of Consultant:
N/A
9. Consulting Fees (stated as dollars per hour or day, or
other agreed upon terms):
Stock options in lieu of cash payment through 12/31/94.
15,000 shares to vest on 12/31/94. Cash to cover benefit cost.
10. The dollar value of this Consulting Agreement is not to
exceed N/A.
/s/ Henry E. Johnston /s/ Scott W. Sherwood
Consultant Cadence Design Systems, Inc.
MISSING INFORMATION COULD CAUSE A DELAY IN THE PROCESSING OF
THE CONSULTING AGREEMENT AND/OR PAYMENT TO THE CONSULTANT.
Schedule A to
Consulting Agreement
A D D E N D U M
SUMMARY OF AGREEMENT
Henry E. Johnston
- - -- For the period May 1, 1994 through December 31, 1994,
Mr. Henry E. Johnston agrees to a minimum of five days
consulting per month. Any additional days to be mutually
acceptable between Mr. Joseph Costello and Mr. Henry E.
Johnston.
- - -- Consulting Agreement to remain effect through December
31, 1994. After December 31, 1994 Agreement governed by Section 8 of
the Consulting Agreement.
- - -- Mr. Henry E. Johnston shall receive an option to
purchase 15,000 shares of Cadence stock, priced at date of
grant. These shares will vest 100% as of December 31, 1994.
- - -- All options granted during the life of this Consulting
Agreement, that are vested at the end of the unbroken
Consulting Agreement, can be exercised up to one year from
the date the Agreement is terminated, or ten years from the
grant date, which-ever occurs sooner.
- - -- Cadence MED 100 and High Dental coverage will be provided to
Mr. Henry E. Johnston, his spouse, Katrina B. and student son,
James F. (eligible as a full time student).
- - -- Medical benefits will have an inputed income value that
will show as payment to Mr. Henry E. Johnston. Cadence will
deliver cash equivalent to 50% of this inputed income to
compensate Mr. Henry E. Johnston for any tax liabilities that
might occur.